Best Experienced With: De La Soul; Tread Water
(please right click on the link below to open the suggested background music in a new window. A little head check for those of you in the second oldest profession….selling. Nothing happens in the business world until you sell something and for that the rest of us worship those of you that carry the bag. You pay our salaries.)
http://www.youtube.com/watch?v=nruVyJmtcqo
Ah, Lent
For some, a time to look backwards in reflection and take stock. Preparation and self denial, combined with abstinence and repentance all mixed together in a tasty broth of preparation for rock removal at the end. Forty days and forty nights of mental self flagellation for some.
For others, a time to have their mom’s tasty tuna fish casserole each Friday evening topped with either crumbled up Saltine crackers or Lays potato chips, depending upon mom’s mood that evening. Tuna casserole was quite the taste sensation. Thank you Pope Paul VI and the Second Vatican Council for changing the rules. Much like pancakes and Spam for dinner, most can only handle that tuna casserole taste sensation every seventh day.
For those of us with a number to hit, Lent always means that we are getting towards the sprint portion of the first lap. On Ash Wednesday, some cool priests will put your quarter number on your forehead in the ashes they made from the palm fronds. This past Wednesday, I proudly walked around Dallas with $XXM written in ash on my noggin. Looked good, too.
A fiscal year is like four 440’s instead of a mile where the best runners break at the end. Four 440’s where you sprint like a lunatic the last month of the quarter. March, June, September, and December are always magical mystical months where if you sprint hard enough and you have an executable plan, you will always be at your quota at the quarter marks. Promise.
First quarter head check.
What is your 2010 number? Where do you need to be on March 31st? Where are you as of this minute in dollars, PTQ, and YTD? Did you have to look that up or did you know? Do you know where your next three purchase orders are coming from in this quarter? Did you see those folks face to face in the past two weeks? Did they smile when you walked in? Who is buying from you in April? Who is buying from you on September 23rd? What kind of music do they love and how many children do they have? When will you see these April customers next? Really?
More? Sure. There are always more questions.
How many places can you sell in your territory? How much are they buying from folks in your market space this year? What percentage do you have to capture of that to make your number? What is your historic market penetration in your territory? How does it historically vary from year to year? What is your penetration plan for the next three years?
Let’s say you and I sell zoo quality crocodiles, squirrels, fish, and monkeys. We can split the country right down the middle. I’ll take the left half because I live there. You get the right because I wear the cape so I get to make to “SWOOOOOOOOSH” sound. Let’s take a look at what we have.
Each of us has 53 zoos. Each zoo is of equal size with an average distribution of our offering as follows:
Crocodiles: 131
Squirrels: 3637
Fish: 10301 (what up Staten Island?)
Monkeys: 151
Asset life (average life span of each animal) is:
Crocodiles: 23 years
Squirrels: 7 years
Fish: 1 year
Monkeys: 13 years
Let’s assume that all the zoo quality animals we offer get upgraded every fourth year to make the math more easy. Our customers choose to rotate in the order we have written above: crocodiles, squirrels, fish, and then monkeys. Our customers all buy those items in the same order and they all buy each in the same fiscal year. All of their fiscal years are calendar years. If you feel like doing harder math, use the asset life above and assume that you have some sort of normal upgrade cycle. I’m no good at Maff so going to stay with the every four years thing here for this example.
Average sales price (ASP) on our zoo quality animals is:
Crocodiles: $7,013
Squirrels: $ 101
Fish: $ 299
Monkeys: $3,013
Should you and I choose to throw this very basic info into a spreadsheet, here is what we would probably see for each of our halves of the country:
| 53 | 131 | 6,943 | 7,013 | 48,691,259 | |
| 3,637 | 192,761 | 101 | 19,468,861 | ||
| 10,301 | 545,953 | 299 | 163,239,947 | ||
| 151 | 8,003 | 3,013 | 24,113,039 | ||
| 255,513,106 |
For the most part, we are not going to change our customer’s buying habits. Customers buy when they choose to buy. The best we can do is ask “when do you need those monkeys here”, “when can you issue me a purchase order for the monkeys”, “who are the monkey decision makers”, and “what is the exact monkey buying paper trail”. We can also plan our forecasts based upon these schedules and, barring us adding wallabies or snow leopards, some years we will sell less than previous years because our customers choose to buy when they want to buy. That is how the world rolls and there’s nothing we can do to change how the world rolls. The best we can do is be in front of customers every week developing relationships, asking questions, taking notes, and basing our strategy on the customer’s unique needs and budget. The most you and I can sell in our respective territories over a four year event horizon is $255M with our current product offering.
If we are in the monkey year, the total amount available for us is $24M and some change. If our 2010 monkey number is $8M, we need to capture 25% market share to keep our jobs. This equates to roughly 2,000 monkeys and we can keep our jobs by selling 14 of our zoos all 151 of their monkeys or we can sell all of our zoos at least 38 of their 151 monkeys. Upside to the former is we can focus our efforts on fewer zoos………..downside to the former is we need friends at our zoos when we hit 2011 running with our crocodiles. Ah, strategery!
Two more questions? Sure…………..
Where you going next week and what are are you going to do when you get there? And where are you going the week after that? What are you going to do when you get there? Rinse. Repeat.
The questions are not market specific. This is why selling surgical gear is no different than selling women’s hosiery. The territory analysis is always the same. Ibid. The market analysis is not market specific. Ibid. Have been fortunate to play in many sandboxes and have had many folks say “it’s different in this market, Mully and you just don’t know this market.” It is never different. Those folks are like The Little Prince with his rose and the behavior is understandable. Give me a big hug while I explain to you that strategic sales and marketing is always the same, whether it is women’s hosiery or surgical gear.
The questions are market agnostic and the questions always lead to driving top line revenue. Just don’t let your sheep eat your rose.
The Mind of Mully
Always look to the positive
And never drop your head
For the water will engulf us
If you do not dare to tread.
This evening’s musing is dedicated to my father, Glove Man. He retired from selling meat this past Friday at the age of 72. Glove Man not only taught me the lessons in this De la Soul song, he has consistently asked the following question of me for twenty-four years when I call on a school day: “you sell anything today”? If I replied “no”, he would immediately say “well, why the hell not”? Thanks, Glove Man.
Mind of Mully Biz Haus Shoppe 